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> “After all, the product itself has no intrinsic value and derives its appeal only from acceptance by others.” Ok, what's the intrinsic value of a $ or € bill

> “After all, the product itself has no intrinsic value and derives its appeal only from acceptance by others.” Ok, what's the intrinsic value of a $ or € bill then?

TrackerFF 5y ago
Ask yourself this: Assume that you have little or no knowledge in foreign countries, but you want to purchase some of their currencies - how would you go on and classify these currencies as "good" or "bad", when viewing them as potential investments. Besides simply looking up their historical exchange rates. It's obviously a complex problem, as we're dealing with parities here - but war/conflicts, poor economies, extreme inflation, and similar factors will drive the currency down. On the other hand, peace, strong economy / industries, etc. will drive them up. One might associate the intrinsic value of a currency with the overall economic health of its country, along with things like geopolitical stability, internal policies, and what not. It's a good mix of micro, macro, and politics. With cryptocurrencies, it's a bit harder to measure things that like. It's a stateless currency, with no industries or workers behind it. There are no wars or conflicts either. No policies made by politicians that can affect its value (in the abstract notion). Essentially, you only have supply and demand to go after - when trying to predict its future value.
- moepstar 5y ago
  Not arguing that what you said isn't true, however, if we just take the statement of the article like it's been written - it just doesn't make a difference if we're talking about the intrinsic value of either - BTC/$/€ Bitcoin is a stream of 1s and 0s, $ and € bills are pieces of paper (not talking about the raw material value of coins rn..). The value of $ and € (and ultimately any currency / fiat) is that has its appeal only from acceptance by others - which is part of the sentence i've copied from the article. Neither do have any intrinsic value.
  - TrackerFF 5y ago
    As far as I know, the USD doesn't have any intrinsic value after they went away from the gold standard - but again, people use all sort of measures as proxies for intrinsic value.

> “After all, the product itself has no intrinsic value and derives its appeal only from acceptance by others.” Ok, what's the intrinsic value of a $ or € bill then?

TrackerFF 5y ago

Ask yourself this: Assume that you have little or no knowledge in foreign countries, but you want to purchase some of their currencies - how would you go on and classify these currencies as "good" or "bad", when viewing them as potential investments. Besides simply looking up their historical exchange rates. It's obviously a complex problem, as we're dealing with parities here - but war/conflicts, poor economies, extreme inflation, and similar factors will drive the currency down. On the other hand, peace, strong economy / industries, etc. will drive them up. One might associate the intrinsic value of a currency with the overall economic health of its country, along with things like geopolitical stability, internal policies, and what not. It's a good mix of micro, macro, and politics. With cryptocurrencies, it's a bit harder to measure things that like. It's a stateless currency, with no industries or workers behind it. There are no wars or conflicts either. No policies made by politicians that can affect its value (in the abstract notion). Essentially, you only have supply and demand to go after - when trying to predict its future value.

moepstar 5y ago
Not arguing that what you said isn't true, however, if we just take the statement of the article like it's been written - it just doesn't make a difference if we're talking about the intrinsic value of either - BTC/$/€ Bitcoin is a stream of 1s and 0s, $ and € bills are pieces of paper (not talking about the raw material value of coins rn..). The value of $ and € (and ultimately any currency / fiat) is that has its appeal only from acceptance by others - which is part of the sentence i've copied from the article. Neither do have any intrinsic value.
- TrackerFF 5y ago
  As far as I know, the USD doesn't have any intrinsic value after they went away from the gold standard - but again, people use all sort of measures as proxies for intrinsic value.